According from a statement released on Monday by Islamic lender Al Salam Bank, it had agreed on merging with fellow Bahrain-based lender BMI. The merger agreement would be done on a share swap. Al Salam would be swapping 11 of its own shares per one BMI Bank share.

Al Salam Bank is a banking enterprise specializing in diversified Islamic banking and financial services. Its Islamic principles-backed operations are in accordance with the regulatory requirements set by Bahrain's central bank. The founding shareholders including Dubai Holding, Dubai Properties and Global Investment House hold a 65% stake in the bank. It had earlier raised over BHD 2.7 billion or USD7 billion in the largest IPO in the history of Bahrain.

BMI bank is partly owned by Bank Muscat. The Oman-base bank owned a 49% stake in BMI Bank.

The merger would be subject to the approval of its shareholders. Al Salam Bank's statement also added that meetings to conduct votes on assent would be held either this month or October.

Earlier in May, bothe Al Salam and BMI expressed their desire to merge both banking firms. Once the merger would be finalized, the Kingdom of Bahrain would be looking at the merged banking firms holding the position as the largest financial institution in Bahrain by assets.